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Imagine a Republican governor slashed Pennsylvania’s regulations and taxes. Imagine a Republican President and Congress slashed federal regulations and taxes.

Would that do anything to ensure a tech boom in central Pennsylvania?

No.

Why? Go try to convince an Ivy League computer engineer to move to the near suburbs of NYC. No prob. Now try to pitch them on moving 3 hours from NYC to Amish country. Impossible. Charles Murray’s Super Zips win every time.

Put another way: Rand Paul might be able to solicit Silicon Valley donor dollars to Kentucky, but he’ll never export Kentucky values to the Valley.

RTWT, and the comments.

This entry was posted on Friday, May 23rd, 2014 at 9:18 am and is filed under Business, Human Behavior, Politics, Tech, USA.
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45 Responses to “Geography and Entrepreneurship”

I read some of the comments and my only observation is that young doctors who considered moving to rural or semi-rural areas that needed their services had to consider their wives’ desires for city life and amenities. This has always been an issue for the medical profession.

For example, a friend has a nephew who is finishing up his training as a multi-boarded super specialist in cranio-facial surgery. His wife is from Orange County CA and wants to live here. His best prospect for a successful career is to find an area that is big enough to need his expertise and is lacking other, similarly trained people. Orange County is probably NOT that area. I had something similar in my own life and can predict trouble for that marriage. The computer engineer might be willing to move to, say Boca Raton Florida where the IBM PC was developed, but his wife, if he has one, might be the determining factor.

I have wondered for some time about the influence of wives on the politics of Silicone Valley.

I think there is danger in the current trend (especially on the part of the media) of defining “technology” as meaning specifically “cool consumer-facing computer stuff.” If you create a site to sell underwear online, you will be a Technology company, if you make autopilots that can land an airliner in zero visibility, you will probably be considered a boring old industrial comapny. The term “technology” has really become more of a fashion statement than a descriptive term.

There is a lot of technology in a jet engine: GE Aircraft Engine is based in Cincinnati, not typically thought of as a center of coolness. Perhaps metallurgists and aerodynamicists are typically less-concerned with being cool than, say, computer game programmers.

OTOH, GE has put its new Software Center in San Ramon, CA, about 30 miles from the heart of Silicon Valley. (I wonder how well this really works in practice. If “Internet of Things” software is to analyze engine vibration patterns and create alerts and maintenance recommendations accordingly, there is going to need to be *very* close coupling between the mechanical engineers in Cincinnati and the software designers in San Ramon….not so much worried about the geographical as the organizational separation.)

Not really sure I buy this argument, though I’m not familiar with the statistics. Sometimes intuition or personal experience is wrongly applied to a wider public. But Amish country is nice. It’s quiet, beautiful and low crime. And a high income will buy a beautiful spread in a rural area like that. Once upon a time, these were seen as draws to people.

People who write about economic development are often absurdly conservative, assuming that the next boom must just be an extension of the recent one. An “Ivy League computer engineer” may be a near-obsolete creature twenty years from now, desperately trying to do the equivalent of automating the buggy whip.

When I was young the coming things were agreed to be petrochemicals and nuclear fuels. Hah!

Dearieme…”When I was young the coming things were agreed to be petrochemicals and nuclear fuels.”

Jeff Immelt, CEO of GE:

“In 1982, the number one employer—hired 18 people from my graduating class at Harvard Business School—was Atari: video games. In 1998, it was dot-coms. What is it today? I would just look at the list of where the most people are going to work and short the stock immediately.”

Yep, I want to live in failed states like CA and NY where corruption and crime are rife, the standard of living is going down while the taxes and the fees keep going up, seemingly without end, and the regulations choke the life out of what is left. I want to pay thousands of dollars a month to live in a closet while I point my finger and laugh derisively at the yokels living in the stix.

You’d think these ‘Ivy League’ computer engineers had heard of a thing like the internet by now. You don’t have to actually live in a city to work for someone stuck there. Or was all this talk about putting everything on the ‘cloud’ and distributed this and remote that just something to fill a glossy prospectus with so that the MBA grads could lure another batch of sucker investors?

Remember, when you’re starting a start-up (or an internal venture in an established corporation), it’s not only the “computer engineers” (and graphics artists and sales reps and biz dev people and PR people) that you need to attract and hire; you also need to hire the executive staff who in turn will be responsible for actually finding, hiring, and managing these people. And while the working-level people can often be remote (indeed, many companies need to get more clueful about this–looking at YOU, Marissa Mayer), and certain management roles can be, it’s more problematic for the senior executive staff. And the same issues apply in attracting them, especially if it’s a young group and an industry where Cool is important.

Ok. Not Central Pennsylvania, which is mostly rocks and trees (Amish country is in eastern closer to Phiily), but how about Pittsburgh which is a very attractive area with lots of urban amenities. Housing that costs about 1/4 of San Jose. Other pluses — CMU which has a top computer science program, the U Pittsburgh medical center is one of the top nationally. I could see that.

I could point out other areas, in other states. But I would not leap to conclusions without mapping the ground I would land on.

BTW: Ivy League engineers are few in number. The Big Ten (or 14 or whatever) has more top engineering programs that the Ivy League.

I’ll second Pittsburgh. I’ve been working almost exclusively at startups in da ‘burgh for nearly 20 years. Robotics, networking, commercial software, embedded software, storage. It’s all here. Google, Apple, NetApp, and Intel all have offices here. Plus… friendly people, a good environment for a family, and a cost of living that actually lets you live.

Just for kicks, I sampled the portfolio of a prominent VC firm from the standpoint of where the startups are locate..took the 4 companies from each of the categories: software & service, consumer & Internet, and energy. The results…

7 in the Bay area
2 in DC metro area
1 in Austin
1 in upstate NY (near Albany)
1 in Jersey City

A lot of times these companies are just trying to figure out what they should be doing. They need to hire generalists who will work day and night on anything then often get jettisoned after a course correction. There’s a lot of churn with employees.
The kind of person willing and able to do that and the type of environment able to sustain them probably isn’t Amish Country.

Low taxes and regulation do help, along with sensible liability legislation and a reputation for honest and sensible courts. You don’t recreate Silicon Valley overnight with those things, and you can’t attract startups to literally just anywhere. But most states have some decent state and private universities, and you can start encouraging startups in areas that can use the expertise of students from some specialized area that your local university happens to have some presence in. You can retain students as they graduate and start companies by making it easy for them to operate (incubators help, but helping them network for investors helps even more). There will always be some skilled people from that area who have moved to the coasts and would like to move back if they could work in their chosen field. There are a lot of little clusters of tech companies outside of the coasts.

Let’s put it this way — you can’t make central Pennsylvania any more attractive to tech startups by raising taxes and imposing even more stupid regulation.

I also think this is interesting, but probably not for the reason intended.

My take is that it gives a nice shiny example of why the GOP establishment is such a thorough, miserable failure, slowly collapsing into irrelevance.

“Republican” is the name of a political party, not a rock band. It doesn’t need to worry about what the cool kids are watching on TV, or how long hipsters are growing their beards.

Its purpose is to win elections, then write laws, which will have an enormous influence upon the nation. If it is successful it will win the next election, and force its opponents to adjust their worldview in light of that success. In other words, it will change the culture. Remember Alex P. Keaton, from that sitcom in the 1980s that I never watched? I read about it later, though. Supposedly, it was intended to be about the leftist parents, but the capitalist character- Keaton- stole the show. I blame Reagan, and his influence upon the culture, etc.

I always think all that should be obvious- but I give you Peter Robinson. I still recall the occasion during the Ricochet podcast when he stated- with a snide contemptuous tone in his voice- that Reagan should have let the auto companies go bankrupt in the 1980s. That told me he had essentially no understanding as to why Reagan- his former boss- was a successful president, and remains well-regarded enough today for clumsy Republican politicians to attempt to mimic him.

Back to that Ricochet thread- let me list a few ways this shows the mental failure of GOP establishment partisans like Mr. Robinson.

1) The believe that failing cities like New York, San Francisco, and Boston are where it’s at, yo. Stop- I’m thinking of this from a conservative political perspective, not economic. If you’re a Republican and you’re worrying that your culture just isn’t popular in the bastions leftists think are cool- you deserve pity. Economically, if you’re a middle class person in any of those cities, you’re screwed. Special note to Peter Robinson- who votes for the GOP? Middle class people, who are being screwed by the leftists in those cities and driven out. Maybe, just maybe, the GOP could find success by representing the interests of the sort of people who actually vote for the party, instead of agonizing that the wealthy and wanna-be wealthy don’t.

2) The handwringing about the preferences of a tiny minority of the electorate- Ivy League graduates. How can they best be served, so they can bring about a tech boom and lift all the dimwitted peasants out of their squalor? I wonder where Henry Ford or Ray Kroc would fit into this Charles Murray-envisioned dystopia of the Super Zips. I suspect nowhere.

3) The simple lack of imagination. Again, the GOP is a political party, etc. But the folks running the party simply can’t conceive of any path to victory except “economic growth.” Back when I was a member of Ricochet I was always amazed at just how many words were expressed about economic theory and how few were expressed about politics.

Here’s a thought: Maybe the GOP should become the party of “freedom,” instead of “economic growth.”

People like freedom. I think there may even be a constituency for it in places like New York and California, where the cities full of the cool kids the GOP establishment wants to be like happen to be.

This is Andreessen’s view also. Certain areas should play to their strengths and core specialities rather than imitate S.V. The legal and regulatory infrastructure would be set up more easily and more effectively locally.

“In Mr. Andreessen’s view, there shouldn’t be 50 Silicon Valleys. Instead, there should be 50 different kinds of Silicon Valley. For example, there could be Biotech Valley, a Stem Cell Valley, a 3-D Printing Valley or a Drone Valley. As he noted, there are huge regulatory hurdles in many of these fields. If a city wanted to spur innovation around drones, for instance, it might have to remove any local legal barriers to flying unmanned aircraft.”

Xennady….I didn’t read Peter R’s post as being focused on serving the desires of Ivy League grads, rather, as being about economic development and the role of culture as opposed to purely economic considerations therein.

I do think the anonymous friend he quotes would have done better to leave the first two words out of “Ivy League Computer Engineer,” there are plenty of people in startups who are not Ivy Leage grads…there are also plenty of people in startups who are not “computer engineers.”

“Republican” is the name of a political party, not a rock band. It doesn’t need to worry about what the cool kids are watching on TV, or how long hipsters are growing their beards.

Its purpose is to win elections, then write laws, which will have an enormous influence upon the nation. If it is successful it will win the next election, and force its opponents to adjust their worldview in light of that success. In other words, it will change the culture. Remember Alex P. Keaton, from that sitcom in the 1980s that I never watched? I read about it later, though. Supposedly, it was intended to be about the leftist parents, but the capitalist character- Keaton- stole the show. I blame Reagan, and his influence upon the culture, etc.

There are lots of people who claim it works in the opposite way. That politics is downstream of culture. Change the culture, politics will follow that road some years later as new and often younger people are elected.

I think it can work in either direction. I think Reagan won the missile defense debate flat out. It isn’t even an issue anymore. Remember it being called ‘Star Wars’ and him being called Ronnie Raygun? A few years later the CNN correspondents covering the Gulf War almost peed themselves with excitement when Patriots intercepted Scuds. I also think the excessive drug culture of the 60’s and 70’s got its push over the cliff by the ‘Just say no.’ campaign, first mocked, then embraced by the culture completely.

On the other hand, I think the culture has driven political and social decisions regarding energy policy. The 1-2 combination of Three Mile Island and The China Syndrome virtually destroyed the nuclear power industry in the USA. That no one was killed or even seriously injured at TMI isn’t even on peoples radar. In their mind, thanks to absurd news coverage, it was a deadly catastrophe. [I think that was my first realization that journalists were, for the most part, idiots.] Michael Douglas, interestingly, has voiced regrets over making that film. Despite still being a solid Leftist, he now believes that nuclear power is a far better power source for our civilization than fossil fuels.

Culture isn’t the only thing driving our civilization but it’s a huge influence. It is perilous to underestimate it.

I didn’t complete that thought. I was referring to the Silicone Valley executives’ obsession with environmentalism. It is sort of a 21st century Protestant theme of virtue and redemption. The theme about Grinnell College was an interesting sidelight on that concept.

Meteor showers are notorious for being unpredictable. A meteor shower is when the Earth flies through a debris tail left behind by a comet. The aspect of your viewing area to the debris, the density of the debris cloud in that spot, whether you fly through the center of it or just graze it, all play a part. Tails left by recent comets tend to have the most debris, that’s why there was speculation that could have been a good one. Didn’t watch it, but I guess it wasn’t. Although being at a dark site helps a lot. Sky glow from scattered city light, high humidity scattering light and moonlight can wash out a lot of the fainter trails. I love meteor showers but haven’t watched one in years.

Grinnell College, which is about halfway between Des Moines and Iowa City, IA, right smack in the middle of nowhere, was Robert Noyce’s Alma Mater. Noyce was one of the founders of Intel and Grinnell invested more than 10% of the venture capital raised to start the company. Grinnell is among the richest small liberal arts colleges, with an endowment of almost $1 million per student.

Xennady….I didn’t read Peter R’s post as being focused on serving the desires of Ivy League grads, rather, as being about economic development and the role of culture as opposed to purely economic considerations therein.

I do think the anonymous friend he quotes would have done better to leave the first two words out of “Ivy League Computer Engineer,” there are plenty of people in startups who are not Ivy Leage grads…there are also plenty of people in startups who are not “computer engineers.”

There are lots of people who claim it works in the opposite way. That politics is downstream of culture. Change the culture, politics will follow that road some years later as new and often younger people are elected.

I’m not one of those people.

We didn’t get Obamacare because the culture demanded it. We got Obamacare because the Republican party failed miserably when entrusted with control of the government, resulting in the election of Barry Obama and too few GOP senators to filibuster.

That political failure will have enormous cultural consequences as well, no matter what happens going forward.

The 1-2 combination of Three Mile Island and The China Syndrome virtually destroyed the nuclear power industry in the USA.

Hold on- there are dozens of nuclear power plants in operation right now, and the US electrical grid couldn’t meet demand without them.

What Three Mile Island and The China Syndrome destroyed was the potential promise of electricity too cheap to meter, because nuclear power made it so cheap to produce.

That was a political failure I pin upon the party that is always prattling on about economic theory and free markets, etc, etc, etc.

Someone should have been arguing against the endless stupid lies churned out by the political left about nuclear power, but that just never happened. Someone should have been making that argument about power too cheap to meter, which would enable widespread use of electrical heating in winter, meaning no heating bill that would be tough to pay- and an end to those heating oil subsidies for New England that I’ve read about.

But no. Instead we’ve got a party that agonizes about how put upon rich people are because not everyone spends all their time thanking them for being rich. The electric bills of the yokels living in the wilds of Amish country or the hick-infested backwoods of Kentucky- where no decent Ivy League grad would want to live- simply don’t rate. What worthy person would have a concern about paying such a trivial expense as their electric bill?

Pshaw. So no, that case was never made.

Nor were the myriad other political cases that should have been made, simply because the wealthy who control the party tasked with opposing the left feel those cases are too trivial to make, and beneath the concerns of anyone of substance.

Hence we have ended up under the governance of Barry Obama, incompetent disaster. And GOP establishment partisans such as Peter Robinson blame the culture for their failure, instead of themselves.

The link posted by Grurray was to a lengthy essay by Tom Wolfe on the role of small colleges and small towns on the origin of Silicone Valley. Robert Noyce went to Grinnell college, majoring in Physics, and about that time Grinnell got two of the first transistors. The essay goes on about the role of small colleges and religion in the life of Noyce. It’s an interesting history of the origin of Silicone Valley and the culture of Fairchild Semiconductor and then Intel.

“Someone should have been arguing against the endless stupid lies churned out by the political left about nuclear power”

That was a result of the anti-nuclear movement, which may well have been the most successful ploy of the KGB in its long history of propaganda and intrigue. The Republicans were probably not at fault. There were many Democrats who bought the lies and that may have been a consequence of the failed venture of Vietnam. The Democrats have done pretty well in evading that responsibility but it has had disastrous effects on their ability to govern, as we see now. Even Bill Clinton, as feckless as he was, took advice from intelligent, if self serving, people. If Clinton was “The internet president,” Obama is the Facebook president. His party is no better.

I strongly suspect you are correct to point your finger at the KGB for the anti-nuclear movement but that excuses neither the democrat party nor the GOP for failing to ensure that the electorate knew who was sponsoring that campaign.

If nothing else the Republican party should have been exposing the money the anti-nuclear movement received from the KGB to advocate against nuclear power and it should have suggesting the obvious conclusion that it wasn’t aimed at making things better for America- but no, crickets.

That’s on them, and I’m tired of hearing excuses for their endless incompetence.

Hence we have ended up under the governance of Barry Obama, incompetent disaster. And GOP establishment partisans such as Peter Robinson blame the culture for their failure, instead of themselves. Forgive me, but I find that infuriating.

Agreed. And you’re not alone.

Hold on- there are dozens of nuclear power plants in operation right now, and the US electrical grid couldn’t meet demand without them.

True, all of which were built or under construction before TMI and TCS. How many NEW nuclear power plants do you see under construction? And that’s a shame because most of the existing plants are Generation I or II. Generation IV plants have many more fail-safe features. Pebble bed reactors, for example, need to be kept actively hot in order to fission. In the event of an earthquake or other disaster when cooling pumps fail, the reaction dies away on its own. And while there appears to be plenty of uranium, thorium looks promising too, and there are vast amounts of thorium available. Right now, it’s considered a waste metal in mining operations. But the public is afraid.

The public simply doesn’t know, because the public has no real reason to know.

Afraid is wrong, ignorant may be better, but neither is accurate. The details about how electricity is generated are not the subject of everyday conversation.

Politics, again. This is the sort of question a political party is expected to present a solution for, complete with a case as to why its proposed measures are best, including information about the specifics. Assuming that this isn’t going to be left up to the free market to resolve, which these days it plainly isn’t.

Anyway, as far as I can recall the GOP has never had anything to say about this at all, ever, leaving the void to be filled by the dirt-worshipping pagans of the green movement.

Except, that is, for that time Mitt “Mittens” Romney went on tape to declare that he believed in global warming, thus obviating any objection to the endless stupidity engendered by those greens.

More failure springing from the political incompetence of those beloved by the GOP establishment, alas.

Does being spectacularly wrong about a major issue in your field of expertise hurt your chances of becoming the presidential science advisor? Apparently not, judging by reports from DotEarth and ScienceInsider that Barack Obama will name John P. Holdren as his science advisor on Saturday. [UPDATE: Mr. Obama did indeed pick Dr. Holdren.]

The power grid is inherently vulnerable physically because it is spread across hundreds of miles, and many key facilities are unguarded. This vulnerability is exacerbated by a reorganizational shift in the mid-1990s, prompted by federal legislation to introduce competition in bulk power across the country, resulting in the transmission network being used in ways for which it was not designed. As a result, many parts of the bulk high-voltage system are heavily stressed, leaving it especially at risk to multiple failures following an attack.

Russian GRU defector Stanislav Lunev said in his autobiography that “the GRU and the KGB helped to fund just about every antiwar movement and organization in America and abroad,” and that during the Vietnam War the USSR gave $1 billion to American anti-war movements, more than it gave to the VietCong.[19] Lunev described this as a “hugely successful campaign and well worth the cost”.

WE are building 2 new 2 unit nukes in Georgia and South Carolina right now. Not exactly a boom, but we are getting a new generation of workers trained up to build more in the next decade. The main thing that killed the previous nuke boom was that we tried to build too many at the same time. Costs spiraled out of control due to demand for concrete, steel, and more importantly, competent engineers and tradesamen to build them.

The anti-nuclear agenda is still in place and it’s difficult to refute the hysteria when Obama chooses a science advisor who is still pushing the fantasies of Paul Ehrlich who is still predicting disaster from population growth in spite of losing his his bet with Julian Simon . Holdren was the advisor for Ehrlich who convinced him that the five natural resources would be scarce. All declined in price.

When has the GOP attempted to refute the hysteria?

I hate to seem like a broken record- but, again, this is a political failure by the party, one of myriads.

I can read refutations of global warming hysteria all day long on the internet, complete with evidence of how warmists are cherry-picking data or simply lying, but the GOP seems to take no notice.

Again, I recall Mitt Romney was caught on tape stating that he believed in global warming, perhaps merely to be polite and noncontroversial, but the damage was done.

If Mittens had been elected after saying that, what would he say when he was confronted with another demand for another ruinous cap-and-trade scheme?

My guess- he’d have tried for a “compromise,” which would be politically disastrous for the GOP as well as idiotic policy for the nation.

This is what we have for knowledge in this administration. I’m actually just as concerned about the stability of the national grid especially with the threat of an EMP attack by irrational actors. Even a small scale attack could be devastating.

I agree completely- but George Bush was president for eight years. What did he do about this?

This is one reason why I feel better about the future than some others I see online. I think there are many people who have simply given up on the political process because it bestows upon us failures like George Bush and Barry Obama.

People see needful things not done, barely mentioned- but always hear endlessly about how we need open borders, amnesty, and gay marriage.

And they recoil, and stop voting.

If the GOP could ever get a candidate that would bother to address the concerns of the mass public instead of those of the business community, we might actually see something accomplished.

Xannedy – alas, I think it probably has much to do with the establishment GOP being just that – the establishment party. They have resigned themselves to being second, if only they can get their chance to dip their beaks. (See Codevilla’s essay on the establishment party vs the country party.)

It is … exhausting, seeing the needful things that need to be done, the matters that really need to be addressed in a serious manner. But we can’t stop – we’ve chosen the hill, now we defend it in our own ways. I defend it with my books, and now and again sallying forth in various internet venues. I should be doing more, in personal meat-space, but there are only so many hours in the day, there are some personal relationships that I cannot harm for policy’s sake – and I live in a pretty upright conservative place as well. Not too many vile progs to try and convince of the errors of their ways. But despair is a sin.

Xannedy – alas, I think it probably has much to do with the establishment GOP being just that – the establishment party. They have resigned themselves to being second, if only they can get their chance to dip their beaks. (See Codevilla’s essay on the establishment party vs the country party.)

That’s a great essay, and everyone should read it. I think Codevilla is spot on.

But I’m also a fan of a book entitled “The Fourth Turning,” by the same people who gave us the term generation X, etc. Per their thesis we are in a crisis era, where things are expected to look every bit as bad as they actually do. But one way or another the crisis passes, decisions are made, and the world moves on.

In my view we have an establishment dominated by left-leaning crony capitalists who refuse to notice that the world has changed. That system has given us both George Bush and Barry Obama, and seems now intent on giving us either Jeb Bush or Hillary Clinton.

This is pitiful, and I take it as a sign that establishment is losing its grip. Another thing I recall from the Ricochet podcast was the occasion Rob Long wondered why there were so few yards signs in New Hampshire just prior to the primary in 2012. I thought that interesting, so I kept my eye out to see if that lack of signs continued.

I was struck by just how few signs I saw for either Barry or Mittens during the rest of the campaign.

My take is that the public is hungry for new leadership, which doesn’t seem to be possible from the present set of fools in DC.

They’re on the way out.

So don’t despair because of the failed leadership we’ve had, look for better in the future.